After the FDA rejection of Zurzuvae in one type of depression and the triple failure of neuro asset dalzanemdor, Sage was searching for a path forward at the end of December 2024. Biogen CEO Chris Viehbacher spied a possible deal, but the smaller company wasn’t interested.
After the FDA rejected one out of two indications for the depression drug Zurzuvae in the summer of 2023, Sage Therapeutics embarked on a whirlwind tour of the biotech fundraising universe to find a partner or other transaction to keep afloat.
According to regulatory documents posted Wednesday, that meant meeting with 43 different parties throughout 2024 and into 2025. We now know that the result of that tour was the up to $795 million acquisition by Supernus Pharma, inked last month.
The focus of the deal was Zurzuvae, which received an FDA nod for post-partum depression in August 2023, but missed out on the larger indication of major depressive disorder which would have opened up a much wider market. Sage had long been partnered with Biogen on the drug.
The regulatory documents show how the Sage-Biogen relationship broke down after Zurzuvae’s mixed approval.
Thanks But No Thanks
After the FDA rejection, and the triple failure of leading pipeline candidate dalzanemdor, Sage was left searching for a path forward at the end of December 2024. The board was pursuing a royalty financing with an unnamed party, which would have provided as much as $200 million in capital.
During a regularly scheduled meeting to discuss Zurzuvae commercialization efforts that month, Biogen CEO Chris Viehbacher raised the possibility of an acquisition with Sage CEO Barry Greene.
At a board meeting later that month, Sage’s executives determined that a royalty transaction was prudent. But to do so, they would need Biogen’s cooperation. Days later, Viehbacher returned with a more concrete offer to acquire Sage at the current stock price plus a 30% premium. Greene declined the offer.
In early January, the royalty transaction was advancing. Viehbacher reached out again, this time warning Greene that Biogen was about to put in an unsolicited offer to buy his company. Greene indicated that he believed public disclosure of this intention would violate the companies’ standstill provision from Biogen’s original stock purchase agreement.
Viehbacher stood his ground. The offer was coming.
On January 10, Biogen publicly offered to buy Sage for $7.22 per share, which was a 30% premium to the stock price that day of $5.55. The deal valued Sage at about $470 million. Sage acknowledged the offer in a press release.
Sage formally filed a lawsuit against Biogen on January 16, arguing that the public disclosure was a violation of their standstill agreement. The board nevertheless agreed to consider Biogen’s offer.
Greene and his deputies headed into the J.P. Morgan Healthcare Conference a few days later to meet with investors. Many encouraged them to accept the Biogen offer but push for more. Others suggested that Sage should seek to reacquire the rights to Zurzuvae, which had long been a hope of the Sage team.
On January 27, Sage announced a plan to explore strategic alternatives, including consideration of a sale or other transaction. The board also at that time formally rejected Biogen’s offer. Meetings with potential buyers followed, including Supernus, who had long been in touch with Sage about a potential partnership or acquisition.
During this period, shareholders put pressure on Sage’s management to do something to stop the cash burn and enter into some sort of deal—and quickly. They suggested that Sage drop its R&D pipeline, among other options.
A court in late January sided with Sage in the standstill litigation, preventing Biogen from issuing any further public offers. They later settled the litigation.
Greene and Viehbacher met again in February for their regularly scheduled meeting, during which Viehbacher indicated that Biogen would not put forward another bid.
In the months that followed, Sage’s board and executives met with multiple parties and considered myriad partnering solutions. They considered chopping up the company and spinning out the pipeline; handing Zurzuvae rights to Biogen; selling the entire company and more.
Supernus was one of the leading companies in the discussions and ultimately won out on June 13 with an offer of $8.50 per share in cash, or $561 million, at closing. A contingent value right put up another $3.50 per share, or $234 million, payable upon certain sales and commercial milestones. The deal was valued at up to $12 per share in cash or $795 million.
Analysts that day called the Supernus acquisition a “good end” for Sage, but an “unremarkable outcome” for an entity that was once one of the most exciting companies working on central nervous system disorders.
While management had been maneuvering in private for more than two years, staff at Sage had a more abrupt end; last week, all 338 remaining workers were sent out the door.
